Re: C-span hearings/interest rates

[Randy Wray <lwray@xxxxxx>]

per
1. yes, higher nom. interest rates are likely to increase cpi, but not
thru owner occupied housing.
2. on pkt we have been thru this real rate stuff several times,
w/davidson/rotheim/wray presenting keynes's position on this, but
apparently they are in a very small minority. to keep it simple and to
the topic at hand, the central bank cannot target a real rate, cannot
influence a real rate in a desired direction. sure, it can raise the
nom rate and hope that the ex post real rate will go up, but as tight
money is inflationary, there is no guarantee.
the real rate hypoth is very weak on theoretical grounds, also, but we
won't go into that again.
randy